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9 Lessons From Safe Trading

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Written by Timothy Sykes
Updated 10/22/2026 9 min read

The overall market the past few days is a good reminder of just how important it is to focus on safety first.

I thought there would be a crash on Monday (I was wrong).

But I’m not convinced the danger is past.

Predicting crashes is a VERY inexact science.

But I can say one thing for sure…

We are SO overdue.

The point is, you must be vigilant and safe above all else right now.

Fortunes are lost by those who are unprepared during crashes.

Look, no trade is ever completely safe. Trading is risky. But everything I teach is about reducing that risk as much as possible.

It’s why I always trade cowardly and constantly repeat “trade scared, so trading isn’t scary.”

With that in mind, I’ve been doing my best to trade safely this week, and I’ve put together this for you…

Safe Trading Lesson #1: Prepare Before You Trade Extended Hours

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Get my after-hours watchlist, free

The Night Tape, every trading day after the closing bell, plus The Second Session guide.

Try to be up at 4:00 a.m. ET. That’s when we have a lot of these runners.

I know it’s not fun. It’s laughable to me. But 4:00 a.m. is the new hot spot. It is what it is.

Remember, in December we’re going to 23-hour trading.

So, this is just the start. But you have to practice for extended-hours trading. You can’t just jump in and expect to do well.

Start preparing now.

Safe Trading Lesson #2: Always Look for Former Runners

I’m always looking for former runners, right?

The past two days, STAK Inc. (NASDAQ: STAK) made some beautiful moves even though it was choppy…

STAK 10/21-22/26, 5-min candles
STAK 10/21-22/26, 5-min candles

One reason I was watching STAK is because it had a nice multi-day run in June. Always pay attention to former runners.

STAK 6-month, daily candles, former multi-day runner
STAK 6-month, daily candles, former multi-day runner

I traded STAK in the after-hours spike on Wednesday (Oct. 21). Which brings me to…

Safe Trading Lesson #3: Dip Buys Are Back

One thing I’m testing right now is dip buys.

For years, the morning panic dip buy was one of my favorite patterns. But for the last couple of years it hasn’t been working as well.

Why test now?

Because the overall market is ugly. Also, after-hours trading has been hot for me.

So, I tried a dip buy on STAK during the after-hours spike.

STAK 10/21/26, after-hours, 1-min candles, dip buy
STAK 10/21/26, after-hours, 1-min candles, dip buy

I got out for small gains. Why not hold longer? I didn’t want to be aggressive given how many failed spikes there were that day.

There’s another reason I was happy to lock in the quick single…

Safe Trading Lesson #4: Know What You’re Good At

I’m not good at $1 stocks. That’s nothing new. I’ve proved it to myself over multiple years.

I’m better at $2–$5 stocks. I thought STAK might be able to get back to $1.30, but not much higher.

Sometimes with $1 stocks you get that quick spike, and then they just fade and go back under $1.

Also, it was near midnight in my time zone…

Safe Trading Lesson #5: Know When It’s Time To Rest

I keep talking about 23-hour trading coming in December. And I encourage you to take advantage of extended-hours trading as soon as possible.

At the same time, you have to get rest. When I was in STAK, I was exhausted.

It’s stupid that I’m staying up past midnight every day and waking up so early for premarket trading.

But, it’s where the opportunity is. So, I’m trying to do my best. To trade safely, recognize when you’re exhausted, okay?

Safe Trading Lesson #6: Expectations Are Key

I had a better trade on Tuesday (Oct. 20) with XIAO-I Corporation (NASDAQ: AIXI)…

AIXI 10/20/26 1-min candles, double top
AIXI 10/20/26 1-min candles, double top

It was a nice 16% winner for me, but as you can see on the chart, it was a clear double top.

I sold it right near the top expecting exactly that.

So, I think expectations are key. We’ve seen a LOT of double tops recently.

Safe Trading Lesson #7: Focus On Risk-To-Reward

Even though the Nasdaq has been ugly the past two weeks…

QQQ 2-weeks, 15-min candles
QQQ 2-weeks, 15-min candles

There are opportunities. But you have to focus on stocks with good risk-to-reward.

There’s so much reward IF you focus on the right stocks.

Yes, there is some risk. You’ve got to be real, right? But if you trade safely, you can navigate this market.

Which brings me to…

Safe Trading Lesson #8: Your Environment and Personal Schedule Matter

I had a crazy experience on Wednesday. Here’s where I was trading (check out the view):

This was one of my most perfect views ever.

Sadly, the outlets didn’t work. I push the laptop lifestyle so much that I guess it shouldn’t be a surprise. It was bound to happen, eventually, right?

I was in a trade and my battery was on 3% and I had to get out. I don’t want to be in a trade with my laptop dying, okay?

So, I got out of the trade and went to get coffee. By the time I got back my trade would have been a big winner. But you never know.

So, it’s better to follow…

Safe Trading Lesson #9: Always Be Willing To Exit

This might be the most important lesson from all of my recent trades.

You never have to be afraid on any play.

If you’re willing to cut losses, you don’t have to be scared. Some people say “it’s so scary trading these stocks, you can get crushed.”

It’s true, you can. But if you have your finger on the trigger and you’re willing to exit, it’s not scary.

Millionaire Moves

I’m flying back to the US on Sunday. I have a really cool presentation on how to target stocks right near the open.

Normally, I don’t focus on stocks right at the open because of the volatility.

For example, I wouldn’t necessarily trade penny stocks right at the open because that’s more like gambling.

But there is another type of stock, where if you have the right strategy and you’re meticulous, it works quite well.

So, Sunday night I’ll be giving a free presentation with a friend of mine, Lance Ippolito. He specifically focuses on this other kind of stock.

It’s good to open your mind to different strategies. Whether or not you utilize it, you should see what’s working in different corners of the market.

I’m pretty pumped for it and you’re invited.

Join me with Lance at 7PM ET this Sunday, October 25…

Discover How To Target Up To 100% Moves In the First Hour of the Trading Day

Key Takeaway

One of the most important things to remember right now is that these are junk companies that we trade.

You’re not trading them for their long-term quality. You’re trading them for their short-term upside.

Yes, there’s big downside too. That’s why you MUST focus on trading safely right now.

Every trade you’re trying to learn a little something good and bad. You’re trying to make adjustments.

Try to take advantage of these awesome plays, and see just how far they can go.

Stay safe.

Cheers,

– Tim Sykes


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Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity.
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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”